Important Tips For First Time Home Buyers
Are you getting tired of renting from somebody else? Have you finally saved up enough to put a down payment on a home? Although you may have been saving up your money for a while, you may not have done much research into the actual home buying process until recently. If you're feeling confused and trying to figure out what to do now, here are some tips to help you get started:
Get pre-approved: You may think that you want to simply start looking at houses, to get an idea of what's out there. But by skipping the mortgage pre-approval step, you could wind up losing out on your dream home. While you're waiting to be approved for the loan, the house that you want could be sold to someone who is actually able to put an offer on it. Getting pre-approved will also give you an exact budget that you can work with. While most people can afford a home that is up to 2.5 times their gross yearly income, circumstances are different for everyone. Depending on interest rates, you may be able to purchase a house that costs a little more or you may not be able to afford quite that much. Pre-approval will let you know exactly how much money you have to spend on your new home.
Set aside extra money: While you may be tempted to put down your entire savings as a down payment for your new mortgage, you should save some of it. If you've never owned your own home, you may otherwise be unprepared for various unexpected expenses that you could encounter. For example, you may have always had your landlord fix any leaky pipes or broken appliances, but now you'll have to pay for these things out of your own pocket. If you use your whole savings as a down payment and your bed breaks while moving or your heater or air conditioner stops working just after you move in, you could be faced with an extremely uncomfortable time until you can afford to fix or replace what broke.
Avoid early repayment penalties: Some banks will charge you penalties and fees if you pay off your mortgage early, while others will not. If you decide to sell the house a few years from now, you probably don't want to have to pay additional money to the bank for selling your home. While you may not be able to avoid early repayment penalties entirely, you can shop around for a bank that offers the least amount of repayment penalties and fees.
Contact your local bank, such as Doolin Security Savings Bank, for more advice about mortgaging your first home.